Comptroller Kevin Lembo commended the General Assembly’s
Labor and Public Employees Committee for voting in favor of a financially
self-sustaining retirement savings program that would serve nearly 600,000
private-sector workers in Connecticut who currently have no access to
workplace-based retirement savings.

Lembo, as co-chair of the Connecticut Retirement Security Board (CRSB) that
studied and drafted the proposal, says this action follows substantial market
research and broad input from the public, academics and business community.

Today’s vote also follows a public hearing by the Labor and Public Employees
Committee earlier this week where supportive testimony was submitted by business
owners, representatives of the financial services industry and many others,
Lembo said.

"Today’s vote recognizes that there is an entire generation of employees,
many of them lifelong hardworking middle class people, who are headed to
retirement financially unequipped, in part due to lack of access to a
workplace-based retirement savings option," Lembo said. "I am grateful to the
Labor and Public Employees Committee for acting to address retirement security -
which is a very serious issue, not only for those individuals and families who
are financially forced to delay retirement indefinitely, but for our entire
state and economy.

"I would like to especially thank state Senate President Pro Tempore Martin
M. Looney and state House Majority Leader Joe Aresimowicz for their leadership,
committee co-chairs Rep. Peter Tercyak and Sen. Edwin A. Gomes, and the members
of the CRSB for their work on this issue.

"I strongly believe that a private-sector solution should be the first answer
to this challenge - but the market is currently failing to reach nearly half of
our workforce. Implementation of this program will actually push many businesses
out into the private market. In fact, in the market feasibility study survey of
Connecticut employers, approximately half of the employers said that – should
the program be implemented – they would go out into the private market."

An Act Creating the Connecticut Retirement Security Program, H.B. 5591, would
create a new quasi-public entity responsible for implementing a retirement
savings program through contracts with private-sector providers. The proposed
program would not be mandatory for businesses that currently already offer a
401K plan or other workplace-based savings option to its employees; it would not
require that participating employers contribute to the program (only that they
provide a payroll deduction mechanism for employees to contribute); and employee
participation would be strictly voluntary (they would be automatically enrolled,
but can opt out if they prefer).

"The goal is not to compete with or replace the private market, but to
fulfill a significant unmet need in the market that must be answered for the
sake of those families and our entire state economy," Lembo said.

The Connecticut Retirement Security Board (CRSB), co-chaired by Lembo and
state Treasurer Denise L. Nappier, was established by the legislature in 2014 to
submit evidence-based recommendations on the creation of a retirement program
for private-sector workers in Connecticut currently without access to workplace
savings.

The CRSB released a comprehensive feasibility study that shows the program
would be feasible, would cover its costs and be self-sustaining likely by the
end of year two, and would be able to repay its start-up expenses likely by year
five.

"The program is designed to operate with a minimal burden on employers, to
achieve a low-cost retirement vehicle for Connecticut employees not covered by
an employer's plan, operate without liability for the state and without
commingling with other state assets, and without requiring appropriations to
support the program," Lembo said. "The program’s governing body would be an
independent quasi-public entity, disconnected from the state’s revenue and
appropriations processes, and operating with a maximum level of transparency."